Rustenburg Local Municipality v Mwenzi Service Station CC

Rustenburg Local Municipality launched a Rustenburg Rapid Transport (RRT) project to establish an integrated rapid transport network, which included dedicating certain road lanes exclusively to buses in the CBD and constructing a central bus station (CBS) on President Mbeki Drive. The respondent, Mwenzi Service Station CC, operated a BP franchise on the corner of Nelson Mandela and President Mbeki Drives. Mwenzi claimed it would lose approximately 50% of its business during construction and after implementation due to reduced traffic flow and the cessation of taxis in the CBD by 2015. When the Municipality refused to pay compensation, Mwenzi sought a court order requiring the Municipality to comply with section 67 of the Local Government Ordinance 17 of 1939 for street closures and the Town Planning and Townships Ordinance 15 of 1986 for rezoning the land for the CBS. The high court ruled in favor of the Municipality on the first issue but against it on the second, ordering compliance with rezoning requirements and interdicting construction of the CBS pending compliance.

• Whether the dedication of road lanes exclusively to buses constituted a permanent closure of streets as contemplated by section 67 of the Local Government Ordinance 17 of 1939, thereby entitling affected parties to compensation
• Whether the Municipality was required to rezone President Mbeki Drive before constructing the central bus station under the Town Planning and Townships Ordinance 15 of 1986 and the Rustenburg Land Use Management Scheme
• Whether an interdict preventing construction of the CBS pending rezoning was appropriately granted

The appeal and cross-appeal were dismissed with costs. Paragraph (c) of the high court order (the interdict preventing implementation of the CBS pending rezoning compliance) was set aside. The Municipality remains obliged to comply with rezoning requirements under the 1986 Ordinance and the Scheme before constructing the CBS, but is not required to comply with section 67 compensation procedures for the dedicated bus lanes.

Section 67 of the Local Government Ordinance 17 of 1939 applies only to the permanent closure of a street (or portion thereof) to all classes of traffic, not to the dedication of portions of a street for exclusive use by a particular class of traffic (such as buses). The dedication of road lanes exclusively to buses, while other lanes remain open to mixed traffic, constitutes a permanent closure for a particular class of traffic under section 66(1)(b)(i), which does not trigger the compensation provisions of section 67. A municipality must comply with applicable town planning schemes and zoning requirements when proposing to construct buildings or facilities on land. Where the planned use does not fall within the defined permitted land uses under the existing zoning, rezoning is required in terms of section 56 of the Town Planning and Townships Ordinance 15 of 1986. The interpretation of permitted land uses in a town planning scheme must be based on the express definitions provided in the scheme, and uses cannot be deemed incidental or ancillary unless expressly provided for in the definitions.

The Court noted that the setting aside of the interdict does not improve the Municipality's position as it remains bound by the principle of legality to comply with the Ordinance and Scheme. The Court also observed that whether rezoning would entitle those adversely affected to compensation under section 44 of the 1986 Ordinance was an issue that did not need to be determined in this case. The Court acknowledged that Mwenzi supported the RRT project "in principle" and considered it "visionary," but this did not affect its entitlement to require lawful compliance with statutory procedures.

This case provides important guidance on the interpretation and application of local government legislation governing street closures and land use regulation in South Africa. It clarifies the distinction between different types of street closures under the Local Government Ordinance 17 of 1939, particularly the difference between permanent closure to all traffic (section 67) versus permanent closure to a particular class of traffic (section 66). The judgment also reinforces the importance of strict compliance with town planning schemes and zoning requirements, emphasizing that municipalities cannot rely on broad definitions of permitted land uses to circumvent rezoning procedures. It demonstrates the principle of legality in administrative action requiring municipalities to comply with statutory requirements even in implementing development projects for public benefit.